Finance Globe

U.S. financial and economic topics from several finance writers.
2 minutes reading time (313 words)

What are the Top Causes of Credit Card Debt?

credit-card-cancel

It is no secret that tens of millions of Americans struggle with credit card debt.

If you’re one of these people, it’s time to formulate a plan for escaping debt as quickly as possible.

If you’ve avoided this in the past, it would be in your best interest to stay on this path in the future. Doing so means many things, such as knowing the top causes of credit card debt. Here are some of the things that could get you in trouble:

•    Poor money management. Simply put, overspending is the top cause of credit card debt. Unless you’re comfortable paying your balance in full, it’s time to take a second look at your approach.
•    Making the minimum payment. Even if you are unable to pay your bill in full, it’s best to avoid the minimum payment trap. With this approach, your debt could drag on for many months (or even years). Also, you’ll find yourself paying quite a bit in finance charges.
•    Unexpected hardship. This can include anything from a job loss to a medical emergency. If you find yourself in this position, it’s best to first get an overview of your debt. From there, implement a strategy for digging out of debt as you deal with your hardship.

As you can imagine, there are many causes of credit card debt. These three are among the most common, but there are others that could get in your way at some point.

There is no denying the fact that a credit card can be a valuable financial tool. However, it can also cause you quite a bit of stress if you overspend and find yourself buried in debt.

Have you ever had to dig your way out of credit card debt? What strategy did you use? Is there anything you would have done differently? Share your feedback in the comment section below.

5 Rules Credit Bureaus Must Follow
5 Credit Card Transactions That Cost the Most
 

Comments 1

Frank on Monday, 25 September 2017 17:46

The biggest reason I found: disorganized and lack of focus. Tons of people I have talked to didn't know they were really in credit card debt until it became a serious problem.

The biggest reason I found: disorganized and lack of focus. Tons of people I have talked to didn't know they were really in credit card debt until it became a serious problem.
Guest
Monday, 19 August 2019

Captcha Image